Editorial: Rate relief package a good deal for Illinois consumers
It took a while, but on Tuesday Gov. Rod Blagojevich finally signed the electricity rate relief bill lawmakers passed in July.
We worried that the delay might kill the deal that legislators worked so hard to strike with Ameren and ComEd because contracts for power were signed and deadlines had either passed or were approaching quickly. Having rates fluctuate because of the volatility of the market could have added costs to the utility companies and jeopardized the agreement.
The delay also meant Ameren customers had to wait longer to get rebate checks, a hardship for those who had to dip into savings to pay ever-escalating bills.
However, there are four key reasons to cheer this agreement.
The $1 billion over three years is significant. ComEd and Ameren offered much less as the companies tried to put the best face on rate increases that averaged 22 percent for ComEd customers and 55 percent for Ameren users after a 10-year rate freeze expired in January.
At one point Senate negotiators were ready to sign off on a $150 million package, but negotiators from the House and Attorney General Lisa Madigan’s office fought for more. Without those efforts, consumers would not get a deal this good.
Ameren customers will see 40 percent to 70 percent reduction in their rates. Many will get rebate checks for the extra amounts they’ve paid this year and then credits on bills until 2010.
ComEd customers will not get rebate checks, but their bills will be credited to provide decreases of about 45 percent.
The reverse auction is dead. The process that created the huge electricity increases was a disaster. The reverse auction created conflict between the generating companies, such as Exelon, which sold power to subsidiaries such as ComEd.
There will be a new independent agency to control the purchase of electricity. The Illinois Power Agency will work to get the lowest cost for consumers. The agency also will have authority to build power plants, or sell bonds so cities and other governmental bodies can build plants, to produce electricity more cheaply.
Energy efficiency and renewable energy. The key to getting lower prices is to reduce demand. The utilities will encourage more efficient use or they will be fined.
The renewable energy component makes sure we take care of the environment. The bill requires that a quarter of the power to be generated from clean, renewable energy by 2025. Illinois becomes the 22nd state to have goals for energy efficiency, according to the Union of Concerned Scientists. Only two states, Maine and Minnesota, have higher goals.
Attorney General Madigan and the legislative leaders who brokered this deal deserve credit for getting the most for consumers.